Automated loss runs: The future of efficient underwritingBy Alesia Siuchykava | June 24, 2019
When pricing a policy, an insurer needs to carefully assess and consider the data available from the application, customer, and agent. Data needs to be as accurate as possible, and it must be timely to meet customer expectations. But when the data is inaccurate, unavailable, or slow to come by, carriers run the risk of making uninformed decisions—and that can cause serious mistakes and potential loss of revenue.
That’s why the value of reliable loss runs can’t be overstated. Insurers need to know the claims history of a risk to take the guesswork out of properly pricing a policy—or even to help determine whether to cover the risk in the first place. Without this key information, without it being reliable and timely, insurers take a big chance because the policy could be priced incorrectly and negatively affect their bottom line.
Historically, the process of getting reliable loss runs has been time-consuming and cumbersome—until now.
The current state
The challenge of obtaining loss runs is twofold: The process takes time, and reliability can be a concern. In some instances, it can take up to two weeks to get loss runs for a risk. That’s much too long for current customer expectations and could cost the insurer the business. This manual process wastes time tracking down information and then takes additional time merging data from disparate sources, such as PDF files and Excel spreadsheets.
Second, if claim history information provided on the application is accepted at face value—just to eliminate the time element and make a sale—data may be missing or unreliable. Using such data can lead to pricing a policy improperly, resulting in premium leakage, or even overpricing, which may, again, cause the loss of business.
Even when an insurer can obtain loss runs, the underwriting process can be inefficient, time-consuming, and prone to errors. Because agents and customers provide data in various formats that might not integrate with an insurer’s system, there’s the risk of both human error and misinterpretation of data.
The Verisk solution: A-PLUS™ Commercial
A-PLUS™ Commercial is a contributory database that uses information from ISO ClaimSearch®. More than 90 percent of insurers already contribute data to the ISO ClaimSearch database. Participating insurance companies can have loss runs within seconds, not weeks, delivered directly into their systems through an API or the ProMetrix® web platform.
The information is provided in a standard format for all lines of business and risks. Underwriters for participating carriers don’t have to worry about requesting loss runs from agents for other participating carriers. This saves time and money—when obtaining loss runs on the front end and when properly pricing the policy—thus avoiding premium leakage and overpricing.
Spending time chasing information or deciphering unclear data can have a potentially negative effect on an insurer’s bottom line. Participating in A-PLUS Commercial helps save time and effectively assess risk.
For more information on A-PLUS Commercial, contact your Verisk representative or visit our website.